China’s brain-computer interface industry is speeding forward | TechCrunch

While Elon Musk’s Neuralink likes to say that it is “groundbreaking’brain-computer interfaces (BCIs), China’s BCI industry is already quietly transitioning from research to scale-up.

A new wave of startups is rushing to commercialize both implantable and non-invasive BCIs, buoyed by stronger policy support, expanding clinical trials and growing investor interest. So says Phoenix Peng, who founded not one, but two BCI startups. He is co-founder of NeuroXess, maker of BCI implants, and founder and CEO of non-invasive ultrasound BCI startup Gestala.

His belief in the potential of this market is based on concrete action: provinces such as Sichuan, Hubei and Zhejiang have already set prices for medical services for BCI, accelerating its inclusion in the national health insurance system.

Over time, he foresees the technology expanding beyond medicine “that treats disease” to “human augmentation,” he said.

“I have always maintained that neuroscience and AI are two sides of the same coin. They are destined for deep integration, establishing direct, high-bandwidth connections between the human brain and AI. BCI will serve as the ultimate bridge between carbon-based and silicon-based intelligence. While this may sound far away, it represents an unimaginably large market in the future,” said Peng.

Four factors driving the BCI in China

But over the next three to five years, BCI use will likely remain concentrated in healthcare, with the market reaching billions of dollars in size as insurance coverage increases, Peng told TechCrunch.

In August 2025, the Chinese Ministry of Industry and six other agencies arrived released a national roadmap to further accelerate the development of BCIs. The plan targets major technical milestones by 2027, common industry standards and a complete supply chain by 2030, with the aim of building globally competitive BCI companies and supporting smaller specialist companies.

When asked what’s driving China’s rapid progress in BCI, Peng told TechCrunch it comes down to four factors. The first is strong policy support, with cross-departmental collaboration that aligns technical standards and medical reimbursement. In December, at the Shenzhen BCI & Human-Computer Interaction Expo 2025, China announced an 11.6 billion yuan ($165 million) brain science fund to support BCI companies from research to commercialization.

The second factor is the vast clinical resources, including large patient pools and lower research costs, which allow trials to be conducted more quickly. China’s national health insurance scheme means faster commercialization once the state approves a device. This compares to the US, where even after the FDA approves a device, private insurers, as the primary payers, must do so individually. Europe is known for applying the strictest approval standards in healthcare technology, with an emphasis on the regulation of data privacy.

Researchers have completed the country’s first fully implanted, wireless BCI trial – only the second worldwide – allowing a paralyzed patient to control devices without external hardware. for CGTN. Neuralink is the startup that does that completed the first such test.

“In the field of traditional electric BCIs, Chinese companies have made clinical progress in motor and language decoding, spinal cord reconstruction and stroke rehabilitation, with more than 50 flexible implantable BCI clinical trials completed by mid-2025,” Peng said, adding that next-generation efforts are now focusing on neural decoding and whole-brain encoding, including ultrasound-based approaches such as Gesture’S.

The third factor is China’s mature industrial production, Peng points out, which includes semiconductors, AI and medical hardware, supporting rapid R&D and prototyping. Finally, there are strategic investments in the market, with both state-led funds and private capital booming under national initiatives.

Some recent major deals include Shanghai-based BCI startup StairMed Technology raises $48 million (350 million yuan) in Series B funding in February 2025. BrainCo, a neurotech company developing its non-invasive BCIs and bionic limbs, also has quiet has filed for an initial public offering in Hong Kong following a report, according to reports $287 million (2 trillion yuan) earlier this year. Peng’s company Gestala, which launched in January, is in talks with investors to close an angel round soon, he said.

All in all, China’s BCI startups are stepping up to challenge American leaders like Neuralink, Synchron and Paradromics. In the midst of the most active players in China are NeuroXess, NeuralMatrix, BrainCo, Bo Rui Kang Tech, Aoyi Tech, Brainland Tech and Zhiran Medical. They include approaches from implantable flexible interfaces to non-invasive brain computing technologies.

This means that China’s BCI market is expected to grow to over $530 million (3.8 billion yuan) in 2025, from 3.2 billion yuan in 2024. according to media reports, with projections making the market worth over 120 billion yuan by 2040.

BCI types

BCIs take two paths. The first is invasive electrophysiological BCIs such as NeuroXess and Neuralink, which implant electrodes in people’s brains for precise signals at the neuron level. But this type carries surgical risks. The second type is non-invasive systems NeuroSky And BrainCo that trade some precision for safety and ease of use.

The field is now expanding further, with emerging approaches – including ultrasound, magnetoencephalography imaging, transcranial magnetic stimulation, optical methods and hybrid BCIs – giving researchers new tools to read and influence brain activity.

Startup founders also hope that non-invasive technology can help overcome adoption barriers. Not everyone is willing to undergo brain surgery to have a device implanted in the head.

Ultrasound BCIs from companies such as OpenAI powered Merge Labs and Gestala target high-prevalence conditions such as chronic pain, stroke and depression. As non-invasive solutions, these technologies are more readily accepted by patients and offer significantly greater commercial scalability.

Gestala, for example, expects to launch its first-generation product in the third quarter, its founder said. Early clinical trials showed promising results: A single session reduced pain scores by 50%, with effects lasting one to two weeks, Peng noted.

HongShan Capital, formerly Sequoia China, has invested in Zhiran Medical, a startup founded in 2022 that focuses on improving the long-term performance of implants. The company uses high-throughput flexible electrodes to reduce inflammation and signal loss due to rigid implants.

“Some technologies may look advanced, but are far from practical application,” said Yang Yunxia, ​​partner at HongShan Capital, wrote in a blog post. While others appear commercially viable, they face “high costs” or significant technical barriers, Yunxia said. Ultimately, investment decisions come down to whether the investor believes a product can be developed into a sustainable business, the partner said.

The coming years

Industry insiders expect China’s BCI regulations to align more closely with international standards over the next five years, with a focus on regulatory approval and data sovereignty. Global frameworks developed by organizations such as the IEC And ISOtogether with guidance from the The US Food and Drug Administration (FDA).), are expected to serve as important reference points.

Chinese regulators are also expected to tighten oversight of invasive devices, as well as the data that all BCI devices generate, while easing approval for non-invasive technologies.

As for ethics faced with brain-implanted or manipulating devices, China plans to strengthen informed consent requirements, expand ethical review beyond medicine, and move toward uniform technical standards for clinical evaluation.